Coinstar Rising on Going-private Rumor (CSTR, NFLX, VZ, AMZN, SBUX)
Shares of the maker of the ubiquitous Redbox video rental machines, Coinstar Inc. (NASDAQ: CSTR), have gotten a nice jolt today from a story in the New York Post that the company is in discussions with an unnamed private equity…
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Not everyone is a believer though. A Wedbush analyst told Reuters, “If I haven’t heard it, it hasn’t happened.”
Coinstar’s Redboxes have mounted a significant challenge to Netflix Inc. (NASDAQ: NFLX) and the company struck a deal with Verizon Communications Inc. (NYSE: VZ) in February that would combine Coinstar’s video rental business with a streaming video offer from Verizon.
Amazon.com Inc. (NASDAQ: AMZN) has also entered the streaming video business, adding to the woes at Netflix and there are some who believe the Internet retailing behemoth may be interested in Coinstar as an additional challenge to Netflix. That seems far-fetched given the overall trend toward streaming and away from physical rentals.
Coinstar also struck a deal with Starbucks Corp. (NASDAQ: SBUX) in June to sell Seattle’s Best coffees at thousands of kiosks across the US beginning this summer.
Shares of Coinstar are up nearly 9% today at $52.54 in a 52-week range of $38.62-$71.82.
Paul Ausick
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Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.
He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.